What You Need to Know About Stock Transfers in Your Estate Plan

One of the greatest benefits of investing is that if done right and scheduled over a long enough period of time, you can acquire assets that will benefit other family members, such as your children, down the line. In order to effectively pass on these resources though, your investment portfolio must be incorporated as part of your estate plan and this requires planning with the assistance of an attorney.

When a person passes away, you must have appropriate arrangements in place for your stocks if you wish for these to be given to a loved one. The only exception to this is when the stocks are owned jointly by spouses. The living spouse will typically acquire sole ownership when the other one passes away.

For individually owned stocks, though, the easiest way to ensure that these are transferred to the right person is by using the uniform transfer on death security registration act. If you want a single individual to inherit your stocks, naming them as your transfer on death beneficiary is the easiest way to ensure that this will happen.

If you intend to distribute investment holdings and your stocks to multiple people, you need to have a comprehensive estate plan drafted by an attorney. You might establish trusts for various assets, assigning who is eligible to inherit various parts of your holdings. Furthermore, it’s a good idea to set up a financial power of attorney to be able to handle your assets in the event that you become seriously disabled and unable to do so. Review your estate planning documents on a regular basis to make sure that your current family composition lines up with your distribution plan.

Estate plans and wills are often opened at the time of death and might still have the names of beneficiaries who previously passed away. Investing is a lifelong process, but you don’t want to fall off towards the end by failing to discuss the future of these funds. This could, in fact, be one of the reasons why so many inheritance funds are spent very quickly at the first two months after they’ve been received by the beneficiary.

Discuss your gift long before you pass away and help to prepare those who will be inheriting your investments.